A new report from Kaufman Hall emphasizes the need for more strategic activity from CFOs in the transition to value-based care.
Healthcare CFOs hold a greater responsibility to enact a strategic vision to successfully transition into a value-based care environment, according to a Kaufman Hall report released Wednesday.
Only 13% of CFOs said they are "very prepared" to handle new payment and delivery models, according to the 2019 CFO Outlook, a 2% decrease compared to 2018's survey.
Additionally, 96% of CFOs think their organizations need to improve how they leverage data to influence strategic decisions, while a mere 7% are satisfied with the performance management reporting at their respective organizations,
These findings come at a critical time for health system executives, who are experiencing wide-ranging change across the industry related to the shift toward value-based care.
Jason Sussman, managing director at Kaufman Hall, told HealthLeaders the biggest takeaway for CFOs is the metric showing a decreased confidence among systems to effectively assess and react to evolving business conditions.
"The confidence in their ability to assess changes quickly and effectively to provide leadership and direction for management is down from 25% to 23% among those we surveyed," Sussman said. "That's a pretty telling trend."
Dimensions of CFO management:
- Financial health: 85%
- Quality of care/clinical outcomes: 80%
- Operational efficiency: 69%
- Strategic growth: 62%
- Employee growth/retention: 52%
Harnessing the power of data operations remains an outstanding goal for CFOs, an area for improvement acknowledged by almost all in the survey.
Sussman said that it usually takes a system between six and nine months to gain access to benchmark data that provides an insight into how the organization is performing compared to the rest of the industry.
He added that as healthcare gravitates towards value-based care, a majority of systems are moving away from the traditional 'slash-and-burn' approach to cost cutting found in a fee-for-service model.
"If you can marry up quality data and productivity data, both operationally and financially, you can actually devise creative ways to provide care in a more effective, efficient, and higher value way to the patient you're trying to serve," Sussman said.
Jay Spence, vice president of healthcare solutions at Kaufman Hall, also told HealthLeaders that CFOs realize they often lack the appropriate tools to effectively manage cost reduction efforts at their systems.
Both Sussman and Spance stated that while there isn't a universal goal for healthcare organizations, the desire to drastically shorten the budget cycle is another shared goal among industry players.
Thirty-seven percent of respondents said their budget process lasts six months or more, a 10% increase compared to the 2018 survey results, while 46% said their cycle doesn't leave adequate time to act on value-added analysis.
Spence said health systems are adopting rolling forecasting as a way to establish their business plans but also respond to changing market conditions in a way that's beneficial for the organization.
"I think when you look at improving the budget cycle, what's implied in that survey is not only do [health systems] want to make it shorter, [health systems] want to make sure that the budget anchors [the organization] as a plan," Spence said. "But [health systems] need the ability to look ahead as well and rolling forecasting allows [organizations] to do that, which makes them more agile in terms of their planning process overall."
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.